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Status:
Point in time view as at 03/10/2022.
Changes to legislation:
Companies Act 2006, Section 405 is up to date with all changes known to be in force on or before 06 March 2025. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations.

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405Companies Act group accounts: subsidiary undertakings included in the consolidationU.K.
This section has no associated Explanatory Notes
(1)Where a parent company prepares Companies Act group accounts, all the subsidiary undertakings of the company must be included in the consolidation, subject to the following exceptions.
(2)A subsidiary undertaking may be excluded from consolidation if its inclusion is not material for the purpose of giving a true and fair view (but two or more undertakings may be excluded only if they are not material taken together).
(3)A subsidiary undertaking may be excluded from consolidation where—
(a)severe long-term restrictions substantially hinder the exercise of the rights of the parent company over the assets or management of that undertaking, or
(b)[extremely rare circumstances mean that] the information necessary for the preparation of group accounts cannot be obtained without disproportionate expense or undue delay, or
(c)the interest of the parent company is held exclusively with a view to subsequent resale.
(4)The reference in subsection (3)(a) to the rights of the parent company and the reference in subsection (3)(c) to the interest of the parent company are, respectively, to rights and interests held by or attributed to the company for the purposes of the definition of “parent undertaking” (see section 1162) in the absence of which it would not be the parent company.
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